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Do interlocks by different types of directors affect the nature of internationalization strategy of emerging market multinationals?
journal contribution
posted on 2021-12-07, 10:29 authored by Saneesh Edacherian, Vidya Sukumara-PanickerVidya Sukumara-PanickerResearch that links boards in general and interlocks in particular with internationalization
activities of emerging market multinationals (EMNEs) has recently garnered significant
attention. However, a focused examination of the impact of the interlocks of different types
of directors on the nature of EMNE internationalization strategy is missing. To address this
gap, we use an integrated agency–resource dependence perspective to distinguish board
interlocks provided by inside directors from those provided by independent directors to
demonstrate their impact on exploratory and exploitative internationalization. We test our
hypotheses on 1996 observations of Indian firms between 2011 and 2017. Our results show
that while inside director interlocks promote exploitative strategies over exploratory
internationalization strategies, independent director interlocks deter exploitative
internationalization. Furthermore, these preferences are contingent upon the R&D intensity of
the firm.
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